Metro Mining Limited · ASX:MMI
Metro Mining — FNN Investor Event (October 2017)
35 slides from Metro Mining's conference presentation, Oct 17, 2017
Slide 1: FNN Investor Event
FNN Investor Event 17 October 2017 1
Slide 2: Investment Highlights
Investment Highlights 1 Proven Board and Management team focused on shareholder value 2 Fully financed to first production – Construction well progressed 3 Simple DSO project well located in Cape York with significant competitive advantage 4 Compelling economics, high margin, long life mine 5 Transf
Slide 3: Corporate Snapshot
Corporate Snapshot Capital Structure (Post-Equity Raising) Share Price $0.23 Share Price (13-Oct-17) $0.205 $0.21 Shares on Issue 1,285.5M $0.19 Market Cap $263M $0.17 $0.15 Options Unlisted 11.7M $0.13 Cash (30-June-2017 Post Equity) $51.4M $0.11 BUY (Jul-17) Target Price: $0.44 Debt Facility (draw
Slide 4: Proven Management Team
Proven Management Team ▪ Metro’s Board & management have collectively been involved in the development and operation of over 30 mines globally ▪ Significant bauxite knowledge and expertise, focused on Cape York bauxite operations and product marketing into China ▪ Strategy is to develop and operate
Slide 5: Achievements & Value Platform
Achievements & Value Platform ▪ Metro has completed several value adding milestones in 2017 to be primed for Q2 2018 production 1 4 Binding Sales Agreement ✓ ✓ Doubled reserves for 7Mt over 4 years & Acquired Gulf – Gained infrastructure Customer Base Growing LOI for 2.5Mt over 3 years Consoli
Slide 6: Operational Overview
Bauxite Hills Mine Snapshot Location Key Statistics 1 Ownership: Metro (100%) Project Overview Location: Cape York, Qld Commodity Bauxite Product Type Direct Shipping Ore Mine Type Surface mining Contained mineral: Reserves 92.2Mt1 Resources 144.8Mt1 Status EA Granted, MLs Granted Construction H2 20
Slide 7: Simple DSO Project
Simple DSO Project Operational simplicity and specialist mining and transhipment contractors enables easy to manage operations Dry season only operating negates risk of weather impact Site location, geological setting and layout provides low Q2 operating costs Clear vegetation & Return overbur
Slide 8: Competitive Advantage
Competitive Advantage ▪ Location, Location, Location ▪ Metro’s low cost shipping is a sustainable cost advantage to China relative to competing bauxite producers ▪ Cape York Bauxite is well known in, and well received by the Chinese market ▪ Minimal working capital requirements provided by speed to
Slide 9: Compelling Economics
Compelling Economics * High Margin Low Capex Avg. LOM OPEX1,2 vs. Avg. LOM Price Received (CIF) CAPEX vs. Avg. LOM EBITDA ~43% margin Payback within 1.7 years $61/WMT $73m $145m Expansion $35/WMT $37m Capital Initial Capex 3 $36m Avg. Opex Price Capex Avg. LOM EBITDA *ASX Release 15 Mar 2017 | M
Slide 10: Strong Cost Curve Positioning
Strong Cost Curve Positioning 2nd quartile cost curve positioning provides attractive long term competitive advantage China Seaborne Bauxite Supply Cost Curve 2019 – Value-in-use Adjusted US$/Dmt (CFR) 1St Quartile 2nd Quartile 3rd Quartile 4th Quartile US$/DMT Source: CM Group Mt 0.0 5.0 10.0 15.
Slide 11: Pathway to Production
Pathway to Production 6 months to Production Early works underway with first 2017 2018 production scheduled April 2018 May June July Aug Sept Oct Nov Dec Jan Feb Mar April Financing Piles & Steel Fabrication Camp Refurbishment Tug & Barge Mobilisation Civil Works ▪ Barge Loading Facility ▪ Haul Road
Slide 12: Bauxite is the Primary Ore of Aluminium
Bauxite is the Primary Ore of Aluminium Key Ingredient for Manufacturing Aluminium 4-6 tonnes bauxite = 2 tonnes alumina = 1 tonne aluminium Key Bauxite Value Drivers Grade Alumina content ranges from 30% - 65% and silica ranges from 2% - 30% Location Proximity to buyer, supply reliability and sover
Slide 13: Structural Change in China
Structural Change in China China’s seaborne bauxite imports are forecast to grow from Declining Chinese Bauxite Reserve Life Years 60 ~50mtpa in 2015 to ~150mtpa by 2030 53 50 Chinese Aluminium Production & Growing Seaborne Bauxite Demand 40 50.0 Imported Alumina as Bauxite Imported Bauxite 30 Years
Slide 14: Key Market End Users & Off-take
Key Market End Users & Off-take* Summary of Xinfa Off-take Binding off-take secured (Xinfa), China’s 2nd largest private bauxite importer. Term 4 years Agreement covers ~50% of first 4 years production with market linked pricing. Total Tonnage 7Mt Lubei LOI (non-binding) for 0.5-1.0mt pa for a m
Slide 15: Positive Bauxite Price Outlook
Positive Bauxite Price Outlook Bauxite has experienced relatively steady and positive price growth since the GFC with growing Chinese demand to support longer term price growth CM Group historic CBIX price & forecast USD$/DMT CFR 80.0 CM Group CBIX BFS Group CM Assumption CBIX Forecast 70.0 60.0 50.
Slide 16: Traditional Owner Engagement
Traditional Owner Engagement Excellent Relationship continues to flourish Ancillary Native Title & Land Access Agreement in place for mine life Liaison Committee with Traditional Owner established Traditional Owner training and employment commenced Traditional Owner employment is 42% and i
Slide 17: Construction Underway
Construction Underway Bauxite Hills Village Barge Load-Out Facility Civil Works Infrastructure New camp under TSA marine infrastructure Civils at Port Area complete Communications solution construction manager confirmed and ordered Haul roads construction Installation Nov 2017 Pile Ins
Slide 18: Bauxite Hills Mine Accommodation
Bauxite Hills Mine Accommodation New Camp Perimeter Existing Camp area Upgraded access & Parking
Slide 19: Port Infrastructure Area
Port Infrastructure Area
Slide 20: BLF Location
BLF Location
Slide 21: Port Civil Works
Port Civil Works ee
Slide 22: Barge Load-out Facility
Barge Load-out Facility
Slide 23: Regional Exploration
Regional Exploration Metro’s exploration exposure covers >1,800km2 of holdings (including Bauxite Hills) on Cape York All tenements are well located on the lateritic plateaus that host bauxite mineralisation Close proximity to the coast Potential to duplicate Bauxite Hills – internal growth
Slide 24: Summary – A Compelling Investment
Summary – A Compelling Investment 1 Metro has significant advantages and is backed by leading partners 2 Strong seaborne bauxite fundamentals in China drive positive outlook 3 Recent achievements have delivered platform for value creation 4 Compelling metrics provides significant share price upside
Slide 25: Background Slides
Background Slides 25 | ASX : MMI | Investor Presentation | October 2017
Slide 26: Board of Directors
Board of Directors Stephen Everett Chemical engineer with 40+ years experience in the resources and construction industries both in Australia and overseas Chairman Formerly Chair of BeMaX Resources, Australian Solomons Gold, JMS Civil &Mining & IronRidge Resources Simon Finnis Mining executive
Slide 27: Supportive Partners
Supportive Partners Metro and Bauxite Hills Mine has attractive strong support from leading product partners and financial investors Economics & Financial Returns Product Quality & Demand Leading Metro’s $39.4M debt facility Globally recognised natural resource lender Specialises in providin
Slide 28: Construction Team
Construction Team Brisbane / Mackay / Gladstone Queensland Feasibility & engineering Civil works Owner’s team project construction management Haul Roads Queensland Townsville Piling works Electrical engineering & design Marine installation Marine infrastructure management N
Slide 29: BFS Summary
BFS Summary Bankable Feasibility Study Highlights* ▪ Completed by MEC Mining in March 2017 ▪ 6Mtpa steady state (initial 2Mtpa) ▪ Contract mining and transhipment ▪ 8 months per year dry season operation (April to Nov) ▪ 5 month construction period Key Results and Assumptions 1 Description Result As
Slide 30: BFS Capital Cost Estimates
BFS Capital Cost Estimates* Capital Cost Item Amount Capital Cost Item Amount Initial Capital Expansion Capital (in years 2 and 3) Integrated Truck dump and screens and Site establishment and haul roads A$3.1M A$13.9M upgraded haul roads Key infrastructure including BLF & camp A$25.8M Transhipment u
Slide 31: BFS Operating Cost Estimates
BFS Operating Cost Estimates* Operating Cost Item BFS LOM Average Mining, haulage and operation of BLF1 A$7.07/t Transhipment activities A$6.71/t Site and administrative costs A$2.65/t Total Operating Costs (ex-royalties and ocean freight) A$16.42/t Royalties A$6.57/t Ocean Freight A$11.71/t Total O
Slide 32: Reserves & Resources
Reserves & Resources* Bauxite Hills – DSO Mineral Resource &Ore Reserve Estimates DSO Bauxite Qualities (Dry Basis) Area Category DSO2 Tonnes (Mt)1 Total Al2O3 (%) Total SiO2 BH1 & BH6 Measured Resource 54.7 50.0 11.9 BH1, BH2 & BH6 Indicated Resource 66.4 49.2 14.5 BH1 & BH6 Inferred Resource 23.7
Slide 33: Attractive Debt Facility
Attractive Debt Facility Debt Financing Secured to Underpin Project Construction Quantum $39.4m (based on 30 Sept 2017 exchange rate) Sprott Resource Lending Providers Ingatatus AG (a related party of Balanced Property) Term ~3 years Security Yes Coupon Low Flexible drawdown schedule R
Slide 34: Disclaimer
Disclaimer FORWARD LOOKING STATEMENTS: Statements and material contained in this presentation, particularly those regarding possible or assumed future performance, production levels or rates, commodity prices, resources or potential growth of Metro, industry growth or other trend projections are, or
Slide 35: For Further Information
For Further Information Contact: Simon Finnis – Chief Executive Officer & Managing Director | Finance & Business Development – Duane Woodbury Ph: +61 (0) 7 3009 8000 | Head Office: Lvl 2, 247 Adelaide Street, Brisbane Q 4000 | GPO Box 10955, Brisbane Q 4000 35